According to Bloomberg News, US equities advanced with dip buyers emerging following last week’s jitters by the central bank and volatility during the season of corporate earnings.
The S&P 500 was seen to rally almost 2% its best performance back to back since April 2020, suffering a loss that recorded 10% to 5.3% at one point of time, which has been considered the worst drop ever during the bear market in the pandemic. The rebound of NASDAQ 100 was stronger, with a 6.6% rise in two sessions.
The month-end rallies are enormous and continue to manifest trends of volatility that have been affecting the markets ever since the Federal Reserve announced its intentions to tame inflation which has been recorded at an all-time high since the early 1980s. In one of the sessions, the NASDAQ 100 managed to erase a loss of as much as 5%, and S&P 500 manifested three straight days of oscillations that topped 3%.
Bloomberg News reports that the wild oscillations were not limited to the bonds and stocks. The biggest gain in January, which surged 17%, was manifested by oil in 30 years when demand surpassed fresh supply. It was seen that the global benchmark for the per barrel was corded at $91 per barrel, thereby registering a gain of 17%. While copper slid, spot gold ended with a 2% drop.
The worst performers of January were seen to be ending with significant advances. Ark Innovation fund, Cathie Woods’ flagship fund, has been increased by 9.5% since March, recording the most important advancement. Goldman Sachs Group Inc was rallying around 10%. The Renaissance IPO ETF earned almost 8%. Netflix Inc and Tesla Inc added 11% each.
Recent gains in the tech stocks can be attributed to the short-covering related to traders that bought back shares of companies that are richly valued. Speculations are rife whether the fed funds rate would increase by 25 bases or 50 basis points at the beginning of the tightening cycle of the fed.
Many companies starting from Alphabet Inc to Exxon Mobile Corp., will be declaring their financial results in the current week, thereby adding to volatility in the future.
Out of the total 172 companies on S&P 500 that have declared their results, 81% have outperformed expectations or have met the same, and as far as profits are concerned, it has been recorded as 5% or above for most from what it was predicted.
The MSCI World Index that ended January showed the worst monthly performance since March 2020.
